NEW DELHI: Finance minister Nirmala Sitharaman on Wednesday announced a 25 per cent reduction in TDS (tax deducted at sources) and TCS (tax collected at source) rate for the current financial year. This will release liquidity worth Rs 50,000 crore.

While unveiling the details of the Rs 20 lakh crore economic package, Sitharaman said that TDS for non-salaried specified payments and TCS for the specified receipts will be reduced by 25 per cent of their existing rates to provide more funds at the disposal of the taxpayers. 

The reduced rates shall be applicable for all types of transactions including payment for contract, professional fees, interest, rent, dividend, commission, brokerage and more.

This will be applicable for the remaining part of the current financial year, that is from May 14 to March 31, 2021, the finance minister added.

She also said that the income tax department has already cleared Rs 18,000 crore worth of refunds where the quantum due was up to Rs 5 lakh and instructed that all pending refunds to charitable trusts and non-corporate business and professions will be issued immediately.